Jophe Jones v. Four Jays Music
Case No: 16CV00271
Hearing Date: Mon Sep 09, 2019 9:30

Nature of Proceedings: Motion to Transfer

Jophe Jones v. Four Jays Music Company, et al., #16CV00271, Judge Sterne

Hearing Date: September 9, 2019

Matter: Motion to Transfer and Consolidate Actions

Attorneys:

For Plaintiff: Robert A. Curtis (Foley Bezek, et al.); Matthew I. Berger (Matthew I. Berger Law Group – Santa Barbara)

For Defendant: Jules L. Kabat (Russ, August & Kabat – Los Angeles); David Alden Erikson (Erikson Law Group – Los Angeles)

Tentative Ruling: The court denies th motion of plaintiff Jophe Jones to transfer and consolidate actions.

Background:

A. The Santa Barbara Action: Plaintiff Jophe Jones and defendant Julia Riva are sisters and the sole officers, directors, and shareholders of defendant Four Jays Music Company (“Four Jays”), a company whose principal business is marketing and collecting royalties from music composed by Jones and Riva’s late grandfather, Harry Warren. Riva is the president, CEO, and CFO of Four Jays. Jones is a former director and CFO.

Jones and Riva have been unable to agree on the management of Four Jays. On January 25, 2016, Jones filed a complaint asserting causes of action to amend the company bylaws to provide for three directors and to appoint a provisional director pursuant to Corporations Code § 308 or, alternatively, to involuntarily dissolve the company pursuant to Corporations Code §§ 1800 et seq. On March 4, 2016, Jones dismissed the second cause of action for involuntary dissolution.

At a hearing on June 13, 2016, the court appointed Edythe Bronston as provisional director. The only extant prayer for relief in the complaint are for appointment of the provisional director (done), amendment of bylaws, and for attorney fees and costs. The amendment of bylaws prayer appears moot for now as the court has appointed a third director provisionally.

On March 2, 2016, Riva filed her verified answer to the complaint. In her affirmative defenses, she alleges negligence, breach of fiduciary duty, bad faith, breach of contract, unjust enrichment, and offset based on Jones’s conduct. She says those were affirmative defenses to the now-dismissed second cause of action. There is no cross-complaint. Four Jays has not appeared in the case.

In her motion to amend orders regarding the provisional director, Riva wanted the court to order Jones to reimburse Four Jays $42,000 for amounts Riva says Four Jays has spent as a result of Jones’s conduct. This amount was to replenish the evergreen account to pay for Bronston’s services. The court denied that request, stating: “The motion seeks relief on behalf of Four Jays, which is a nominal defendant in this case, not a plaintiff, and which has not appeared in the case. The relief is outside the scope of the complaint, which seeks only the appointment of a provisional director.”

Riva had pointed out that Bronston has reported that Jones and her brother, Peter Hacker, doing business as MattSam Music, contracted with Carlin Music Corporation (“Carlin”), granting Carlin rights to administer, use, license and exploit certain Harry Warren songs in the British Reversionary Territories (“BRT”). These songs included songs currently held by Four Jays, including those listed on the September 5, 1996 assignments of all Jones’s rights in 226 published Harry Warren songs, which assignments were recorded in the U.S. Copyright Office. On three occasions, Carlin asserted its rights under the contract with MattSam Music. Each time, Four Jays incurred legal fees, fees for Bronston’s time, and other expenses in resolving the issue.

On December 17, 2018, the court granted a motion to change Bronston’s reporting schedule to every six months instead of every two months. The court did not amend the appointment terms and denied the request for sanctions.

B. Los Angeles Action: Riva, individually on behalf of herself and derivatively on behalf of Four Jays, sued Jones, Todd Hooker (a director of Four Jays), and Four Jays (as a nominal defendant) in the Los Angeles Superior Court (#BC720162). Riva alleges: Jones has repeatedly submitted sham BRT claims to divert royalties from Four Jays to herself and Four Jays has suffered damages in defeating the claim. Jones had secretly been taking large amounts of cash from Four Jays’s accounts and having Four Jays pay for all manner of her personal expenses, including but not limited to her husband’s health insurance bills, her mortgage, and expenses relating to the renovation and maintenance of her personal residence (e.g., gardening, plumbing, house painting, utilities). The causes of action in the complaint are 1) breach of fiduciary duty, 2) intentional interference with contractual relations, 3) conversion, 4) accounting, and 5) removal of Hooker as a director.

The Los Angeles court dismissed Jones and Hooker’s motion to transfer the case to Santa Barbara as premature. The court overruled Jones and Hooker’s demurrer to the complaint.

Jones filed a cross-complaint against Riva and Four Jays. She alleges Riva has sought to blur the line and confound the understanding with regard to what is owned by the Warren estate and what is owned by the Company in an effort to acquire assets and resulting revenues that are rightfully due her siblings and co-heirs. Jones alleges a long list of malfeasance and misfeasance by Riva, including that Riva has: converted corporate property for her personal use by operating her commercial clothing enterprise on the company’s premises and utilizing company workers to provide services to the clothing business; paid her personal maid as an employee of the company; utilized the company’s limited resources and money collected for her own lifestyle and purposes, including personal trips, expensive restaurants, strip clubs, personal car payments, groceries, and posh department stores; used the company’s premises for her personal residence and personal storage for herself and her son; and used company funds to pay for her personal auto expense, home improvement projects and repairs, pet expenses, and personal attorney fees. The causes of action are: 1) misappropriation of royalties, conversion; 2) intentional interference with prospective economic advantage; 3) negligence interference with prospective economic advantage; 4) damages for slander of title; 5) breach of fiduciary duty; and 6) demand for an accounting.

Hooker filed a cross-complaint against Riva and Four Jays for 1) failure to pay earned wages, 2) waiting time penalties, and 3) indemnification.

C. “Related Cases”: When overruling Jones and Hooker’s demurrer to the Los Angeles Action, the Los Angeles Superior Court judge ordered Riva to file a notice of related case in this action. Not agreeing that the cases are related, on May 30, 2019. Riva instead filed a “California Rule of Court 3.300 Notice,” stating that she does not believe the cases are related. Thereafter, on June 11, Jones filed a notice of related case and, on June 12, Riva filed an opposition to that notice pursuant to CRC 3.300(g). The court has not taken action on the notice of related case.

Motion to Transfer and Consolidate Actions: Jones moves to transfer the Los Angeles Action to this court and to consolidate it with the Santa Barbara Action.

1. Objections to Evidence: Riva objects to many statements in the declarations of Todd Hooker and Jones’s counsel. The court will not take the time to rule on the objections as it has not relied on the statements related to the objections made.

2. Transfer and Consolidation: “A judge may, on motion, transfer an action or actions from another court to that judge’s court for coordination with an action involving a common question of fact or law within the meaning of Section 404.” CCP § 403. CCP § 404 provides for coordination when actions meet the standards specified in CCP § 404.1.

Coordination of civil actions sharing a common question of fact or law is appropriate if one judge hearing all of the actions for all purposes in a selected site or sites will promote the ends of justice taking into account whether the common question of fact or law is predominating and significant to the litigation; the convenience of parties, witnesses, and counsel; the relative development of the actions and the work product of counsel; the efficient utilization of judicial facilities and manpower; the calendar of the courts; the disadvantages of duplicative and inconsistent rulings, orders, or judgments; and, the likelihood of settlement of the actions without further litigation should coordination be denied. CCP § 404.1.

“The court to which a case is transferred may order the cases consolidated for trial pursuant to Section 1048 without any further motion or hearing.” CCP § 403.

CRC 3.500(d) lists eight standards to which a court must reference in any order transferring a case from another court pursuant to CCP § 403. Those standards are lifted from CCP § 404.1. While those factors should be considered in ruling on a motion under CCP § 403, they do not supplant the sole reason for a transfer under that statute, i.e., “an action involving a common question of fact or law within the meaning of Section 404.” The court only takes those factors into account when considering “coordination of civil actions sharing a common question of fact or law” (CCP § 404.1) and “when civil actions sharing a common question of fact or law are pending in different courts” (CCP § 404).

The only extant portion of Jones complaint in this case is for appointment of a provisional director under Corp. Code § 308. The only question before the court “is whether there is a deadlock and not why such deadlock may exist.” In re Jamison Steel Corp., 158 Cal.App.2d 27, 39 (1958). Any defense of unclean hands does not apply. Id. at 38-39.

It is true that Jones alleged in her complaint: “Grounds for involuntary dissolution also exist in that MS. RIVA, acting has President, has been guilty of or have knowingly countenanced persistent and pervasive abuse of authority, mismanagement, and persistent unfairness toward Plaintiff, and the Company’s property is being misapplied or wasted by MS. RIVA.” [Complaint ¶14] But, as shown by its placement in the complaint and as expressly stated in that paragraph, it is part of the second cause of action for involuntary dissolution, which Jones dismissed on March 4, 2016. That allegation has no relevance to the present action.

This court has appointed Bronston as provisional director and receives her reports. Other than one amendment to the reporting schedule, this case has been dormant since Bronston’s appointment over three years ago. In her reply, Jones says this court “continues to exercise jurisdiction over members of the Board.” But that is not true. There is no prayer seeking an order to require any board member to do or not do anything.

Jones emphasizes Riva’s request, in her motion to amend the provisional director’s appointment terms, that Jones pay Four Jays $42,000, a claim essentially incorporated into the Los Angeles Action. But that is an example of why the cases do not involve common issues of law or fact. The court said that was a request for relief that is “outside the scope of the complaint, which seeks only the appointment of a provisional director.”

In the Los Angeles Action, Riva seeks to remove Hooker from the Four Jays board. But, other than the provisional director, the makeup of the board is not before this court. That request for relief in Los Angeles does not raise a common question of law or fact with this action.

Jones argues that the Los Angeles court determined that the cases are related when it ordered Riva to file a notice of related case in this court. First, this court is not bound by any ruling in the Los Angeles court and that court’s jurisdiction to order a filing in this case is suspect. It might be appropriate to suggest a party who thinks the case is related should file a notice of related case. (Riva does not agree that the cases are related. It appears the court ordered her to take a position in this case with which she does not agree.) Second, this court has not determined the cases are related pursuant to CRC 3.300(h). Third, related cases are cases that “involve the same parties and are based on the same or similar claims.” These cases involve many of the same parties—only Hooker is not a party to both. A “similar” case does not necessarily involve common questions of fact or law. The rule recognizes this difference by providing different courses of action for related cases and cases that should be formally coordinated under CCP § 403. CRC 3.300(h)(2)(A) and (B).

Jones argues that the cases will involve the same witnesses and most if not all of them would be inconvenienced by having to appear in Los Angeles. Based on the discussion about the extant issues in this case above, the court does not believe any of the witnesses other than the current and former board members (totaling four persons, including the provisional director) would have anything to say that is relevant to the deadlock in the board.

If Jones believes a change of venue of the Los Angeles Action would promote the convenience of witnesses and the ends of justice, the remedy is to ask the Los Angeles court to change venue pursuant to CCP § 397(c). To be clear, this court takes no position on the merits of such a motion.

For the foregoing reasons, the court denies plaintiff Jophe Jones’s motion to transfer and consolidate actions.